"Hannapak has built an outstanding folding carton business in Australia based on their superior capabilities and customer service," said Steve Voorhees, chief executive officer of WestRock. "We have a strong relationship with the company and the Hanna family based on an 18-year partnership as one of our key converting partners in the region, and we are excited about the clear cultural and operational fit between the two companies. This acquisition expands our geographic footprint to better serve global and local customers, and will enable us to improve WestRock's beverage packaging business in the region while expanding our participation to a variety of other attractive end markets."
Hannapak is based in western Sydney in North Richmond, New South Wales. Started in 1967 by Charles Hanna, the company converts approximately 30,000 tons of paperboard into folding cartons, including for WestRock's beverage packaging customers. The business has been led by Sam Hanna, who joins WestRock and will continue to lead the acquired operations.
WestRock expects to generate significant synergies with its current business in the region, including integration of additional WestRock paperboard into the Hannapak system. The AUD$75 million purchase price will be paid in cash and is subject to a customary net working capital adjustment. The purchase price represents an EBITDA multiple of seven times (pre-synergies) or less than five times after WestRock's synergies have been taken into account.
This release contains forward-looking statements that are based on management's current views and assumptions and are typically identified by words or phrases such as "may," "will," "could," "should," "would," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "prospects," "potential" and "forecast," and other words, terms and phrases of similar meaning. Forward-looking statements include statements such as that (i) the acquisition expands our geographic footprint to better serve global and local customers, and will enable us to improve our beverage packaging business in the region while expanding our participation to a variety of other attractive end markets and (ii) we expect to generate significant synergies with our current business in the region, including integration of additional WestRock paperboard into the Hannapak system. Factors that may affect actual results include, but are not limited to, economic, competitive and market conditions generally, volumes and price levels of purchases by customers; our ability to realize anticipated synergies; and competitive conditions in our businesses and possible adverse actions of their customers, competitors and suppliers. Please refer to the cautionary statements set forth in Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2016 and Quarterly Reports on Form 10-Q for the quarters ended December 31, 2016 and March 31, 2017. We undertake no duty to update forward-looking statements.